Focus on: Assortment Planning

Levi Strauss & Co. is making a conscious effort to transform consumers’ perceptions of the company from a mere wholesaler to a true multichannel retail company. At the heart of this transition: a focus on serving shoppers locally and creating assortments that meet their needs.

Worldwide, Levi Strauss operates almost 3,000 stores, comprised of corporate, franchise and outlet locations. While the company’s iconic brand is recognized around the globe, that is not enough to align Levi Strauss with shoppers on a global level.

“We knew we needed to reinvent the brand,” said Tom Peck, CIO for the San Francisco-based company. “To cater to shoppers worldwide but on a localized level, we had to become agile like niche apparel companies.”

Historically, the company operated a centralized, “cookie-cutter” business that helped keep price points low, but it didn’t react to local customer trends. With the explosion of e-commerce and more digital options such as social networking and mobile retailing, Levi Strauss is ready to reach out to its shoppers and deliver the merchandise and service they expect.

At the core of this movement is adding technology that can support global brand management and consistent reporting enterprise-wide.

“Merchandising and assortment planning is paramount for us, and getting the right product to the right door at the right time is mission critical,” Peck said. “Currently, these tools vary around the globe, making it challenging to provide a consistent in-store experience.”

Levi Strauss has embarked on what Peck calls “a multi-year journey” to creating a global platform. The company is already taking steps to optimize product assortments and supply chain processes that will help localize assortments in stores around the world.

Levi Strauss is using the Apparel and Footwear Solution from SAP America, Newtown Square, Pa., as the core platform for the transformation. The infrastructure supports the company’s financials, procurement and sales management processes. Levi Strauss is also rolling out assortment planning and integrating the solution with SAP’s Advanced Planning & Optimization solution, which handles long-term and short-term demand.

By flowing data from its retail systems, including point-of-sale information, as well as from wholesale operations into AFS, the company can use the platform’s demand planning and supply chain management modules to procure goods based on consumer demand. The supply chain management solution provides a global view of demand across retail and wholesale channels.

The platform also helps Levi Strauss create localized assortments with the help of an integrated business intelligence module that can drill down to demand by region and location worldwide. Since the company has “a tremendous amount of data coming from different sources via different user interfaces,” Peck explained, Levi Strauss is currently consolidating data warehouses and analytics tools and creating a globally aligned set of data hierarchies to run reports.

“By the end of the year, Levi Strauss expects to have all global POS data consolidated onto one SAP BI tool for our Asian region,” Peck said. “This will be rolled out globally by mid-2011, giving business leadership a consistent global view of our retail sell-out and wholesale sell-in data.”

Currently, operations in the United States and Asia are outfitted with SAP AFS, and Europe should be online by summer. The next step is to introduce the system into the company’s other emerging markets.

Levi Strauss is also currently rolling out the assortment-planning tool to its European business unit, and global rollouts will continue throughout 2011. Looking ahead, the company plans to further optimize its merchandising, warehouse management and customer relationship management efforts.

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